‘Pol­i­tics over­shad­ows ev­ery­thing’ – again

Irish Independent - Business Week - - IN PERSON -

EURO­PEAN shares sta­bilised yes­ter­day af­ter ini­tial gains, amid cau­tion ahead of the G20 meet­ing in Ar­gentina.

Brexit was also high on the agenda for in­vestors again yes­ter­day, with the fin­ish­ing line for the UK par­lia­men­tary vote near­ing. Prime Min­is­ter Theresa May is said to have backed down in a key Brexit bat­tle­ground, clear­ing the way for MPs to vote on po­ten­tial changes to her mo­tion.

The Stoxx Europe 600 in­dex was un­changed as the clos­ing bell ap­proached. It’s 0.67pc ahead for the week, but still 8.6pc lower in the year to date. US cloud soft­ware firm Sales­force gave a rev­enue fore­cast ahead of ex­pec­ta­tions, which lifted its Euro­pean peers.

“Pol­i­tics pretty much over­shadow ev­ery­thing,” said Mat­tias Sundling, a se­nior strate­gist at Danske Mar­kets Swe­den. “It’s the trade talks, it’s Brexit, it’s Italy and it’s the Fed. A sig­nal from any of them has a ten­dency to dom­i­nate the day.”

US stocks opened higher, but early ad­vances were muted amid the lat­est salvoes from US Pres­i­dent Don­ald Trump in the trade war with China, and ahead of a Fed meet­ing.

In Ire­land, the Iseq Over­all In­dex was lower, hav­ing de­clined 0.6pc to 5,838 just a short time from the close.

Movers dur­ing the ses­sion in­cluded home builder Abbey, which ad­vanced 3.4pc to €15 as the UK’s Telford Homes re­ported a rise in prof­its. Most of the homes Abbey builds are in the UK. Ryanair was 1.4pc ahead at €11.96 just be­fore the ses­sion ended.

Per­ma­nent TSB, Bank of Ire­land and AIB all fell as the Cen­tral Bank said its re­stric­tions on mort­gage lend­ing would re­main in place.

The UK’s Ftse-100 was down 0.1pc min­utes be­fore the close, while Germany’s DAX was flat and France’s CAC-40 was up 0.1pc.

Mean­while, NatWest Mar­kets said that ster­ling could re­visit a year-high of $1.43 if Brexit un­cer­tainty is re­moved. It claimed that long-term for­eign in­vestors were wait­ing in the wings to scoop up UK as­sets at at­trac­tive val­u­a­tions.

Ster­ling is un­der­val­ued against most Group-of-10 cur­ren­cies in terms of OECD pur­chas­ing power par­ity. It’s down 14pc against the dol­lar and 13pc against the euro since June 2016.

Bloomberg

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